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« Take action to block teetering nuclear loan guarantees! | Main | Fukushima further bursts the bubble of the "nuclear renaissance" »
Wednesday
Feb152012

Obama administration calls for no expansion to nuclear loan guarantee program in FY2013 budget!

The American taxpayer could still get burned for $8.3 billion if the Vogtle atomic reactors #3 & 4 default on their loan repaymentsAs reported in the Huffington Post, for the first time in three years, the Obama administration has not called for a major expansion in the nuclear loan guarantee program. In fact, it has called for no expansion at all.

In his Fiscal Year 2011 and Fiscal Year 2012 budget requests, fresh on the heels of explicitly promoting nuclear power in his State of the Union addresses, President Obama called for a major expansion of the nuclear loan guarantee program, to the tune of $36 billion. However, as a testament to people power over nuclear power, the nuclear lobbyists didn't get away with it -- we stopped them time and again on Capitol Hill, through tireless concerned citizen pressure! It's a huge grassroots environmental victory!

The program already had $22.5 billion, however, mostly authorized during the George W. Bush administration, snuck through on December 23, 2007 when most Americans were more tuned into holiday celebrations with family and friends, rather than the backroom wheeling and dealing by dirty energy industry lobbyists on Capitol Hill. Of that $22.5 billion already authorized, $18.5 billion was set aside for new atomic reactors, while $4 billion was set aside for new uranium enrichment facilities.

In Feb. 2010, President Obama announced the first nuclear loan guarantee himself -- $8.3 billion for two new atomic reactors at Vogtle nuclear power plant in Georgia. On December 30, 2011, the U.S. Nuclear Regulatory Commission approved the Toshiba-Westinghouse AP1000 reactor design, despite lingering concerns about major safety flaws. Just this month, by a 4 to 1 vote (with NRC Chairman Jaczko dissenting), the NRC Commissioners approved the combined Construction and Operating License Application (COLA) for Vogtle Units 3 and 4.

Another leg up for Vogtle 3 & 4, this time at ratepayer expense, is Construction Work in Progress (CWIP) charges on ordinary family's electricity bills, making them pay for the reactors in advance. CWIP is illegal in most states. Yet another leg up, at federal taxpayer expense: the AP1000, along with the General Electric Hitachi ESBWR (so-called "Economic Simplified Boiling Water Reactor") has benefitted from U.S. Department of Energy "Nuclear Power 2010" research and development 50/50 cost sharing.

That leaves $10.2 billion in the new reactor loan guarantee fund. Constellation Energy walked away from an Obama administration offer of $7.5 billion in loan guarantees for the Calvert Cliffs 3 French Areva "Evolutionary Power Reactor" (EPR), because the Office of Management and Budget demanded an $880 million credit subsidy fee up front -- something Constellation had unsuccessfully lobbied for American taxpayers to have to largely pick up, too, on their behalf. Another lead candidate for a massive federal new reactors loan guarantee was the South Texas Project Units 3 & 4 -- but this proposal "melted down" after the Fukushima Daiichi Nuclear Catastrophe because partners included Tokyo Electric Power Company, as well as Toshiba and Hitachi of Japan, and the Japan Bank of International Cooperation. 

The $4 billion set aside for new uranium enrichment plants was intended for Areva of France's project in Idaho, and U.S. Enrichment Corporation's project in Portsmouth, Ohio. Both proposals have hit snags.

On Feb. 15, Energy Secretary Chu visited the Vogtle Nuclear Power Plant, in a continuing sign of support by the Obama administration for new nuclear power expansion, despite its cancellation of the nuclear loan guarantee expansion. Chu is still requesting $770 million from Congress for promotion of nuclear power in the new fiscal year. Such subsidies would be in addition to the $13 billion authorized by the 2005 Energy Policy Act, and hundreds of billions of dollars in public subsidies provided by ratepayers and taxpayers to the nuclear power industry over the past 50 years.

Just last Friday, Chu warned the more federal energy loan guarantees could default, as did Solyndra.

Vogtle is an ironic poster child for the "nuclear renaissance" (or relapse). Vogtle Units 1 and 2 came in 1,300% over budget. If Vogtle Units 3 and 4 default on their loan repayments, the American taxpayer could be left holding the bag for $8.3 billion -- 15 times more than the $535 million recently lost to the Solyndra debacle.

As indicated in the Huffington Post article above, the Solyndra scandal could explain in large part why the Obama administration is backing away from a major expansion in the nuclear loan guarantee program in a presidential election year. A E&E Special Report on the Solyndra scandal, entitled "As controversy simmers, Obama seeks no new funding for DOE loan guarantees," ran on Feb. 14th.

Thanks to all Beyond Nuclear supporters who have taken actions on any of our countless calls over the past 5 years to urge your elected officials to oppose nuclear loan guarantees. The Obama administration's cancellation of the $36 billion nuclear loan guarantee expansion in the FY2013 budget request is a huge grassroots environmental victory, and it wouldn't have happened without you!

But we must remain ever vigilant -- the U.S. Congress could authorize a nuclear loan guarantee expansion, even if the President hasn't requested it. And given Obama's continuing support for nuclear power, he would probably sign such a congressional proposal into law. So please print up copies of our "Crushing Burden" ad, and send it to your two U.S. Senators and your U.S. Representative, urging them to oppose any nuclear power subsidies whatsoever. And send copies to President Obama and Energy Secretary Chu, thanking them for canceling the $36 billion nuclear loan guarantee expansion, and calling on them to roll back other nuclear power subsidies as well.